A primary school teacher who developed "school phobia" after being bullied and harassed by her headteacher has won almost £90,000 damages from her local authority.

Judge Brian Knight ruled that the treatment of Margaret Menzies, 58, by her headmistress, Valerie Hughes, amounted to bullying, harassment and an unacceptable way of discharging her duties. Ms Menzies, a teacher for 36 years, needed psychiatric treatment for a phobic disorder and depression.

The judge said an atmosphere of "paranoia, threat and negative criticism" reigned in the school, Chalgrove Primary in Barnet, north London, under Ms Hughes, who has since resigned. The judge was critical of Barnet Council for failing to treat the situation sufficiently seriously. He awarded Ms Menzies damages of £86,487.

Ms Hughes's behaviour included insisting that Ms Menzies "clock out" every evening and refusing her time off work to have a hospital scan.

Ms Menzies, who has since taken early retirement and returned to her native New Zealand, said: "I suffered from the drip, drip effect of undermining, intimidating and unfair treatment.

"My every move was wrong in [Ms Hughes's] eyes. She wanted me to leave as 15 other people had done in four years.

"I got to the stage where I couldn't sleep and I was losing weight. I was anxious and exhausted and would freeze at the thought of going into school. Sometimes when I went home in the evenings, I would go to bed immediately and stay there. It was the only place I felt safe.

"I could not consider going near a school again - it would bring it all back to me."

Ms Menzies took up a post at the school in 1998 after 27 years of teaching at other schools in Barnet. She took long-term sick leave in January 2001 and was granted retirement on grounds of ill-health the following September.

Teachers at the school told Central London county court that Ms Menzies was picked on by Ms Hughes. One said: "It was pitiful to see a person of such exemplary professionalism, who I looked upon as a role model, falling apart."

By 1999, the local authority's primary inspector described the school as "at risk". A year later it was said to be "causing concern" because of poor relationships between staff and poor leadership. By November 2000, only two teachers had been at the school for longer than a term.

Doug McAvoy, general secretary of the NUT, said: "The court's decision and the size of the award is a clear and strong message to local authorities and senior managers in our schools. Bullying and intimidation of members of the NUT will not be tolerated."

The NUT said it was the first time it had been given a legal ruling that an employer was in breach of its duty in failing to tackle bullying.

A spokesman for Barnet Council said last night: "This award relates to events that took place several years ago and the school has been under a new headteacher since 2001.

"The school recently received a report from Ofsted [the education watchdog] which commented favourably on the high quality of its leadership."